Want to start investing, but not ready, or don’t have the time, to pick your own shares? That’s why we built Verve Money!
“I want to start investing, but I don’t know enough about shares yet.”
“I’m an experienced investor, but have realised, I don’t have time to manage my investments properly.”
We hear both of these comments a lot.
And we know why so many people think like this.
It’s in part, because our media has built an image that a pro investor is someone who sits around with their buddies chatting stock picks and is an expert in picking winners. But it’s also because of the explosion of finance apps in the market targeting beginner investors to start investing in individual shares.
Australia’s investing culture is very much dominated by the image of “investor bros” and a get rich quick, often at high risk, mentality. The amount of times I’ve been asked for “my top stock picks”- I can’t tell you.
We hear stories of someone doubling their money in a year as some stock soared, but we also hear the stories of those who invested in stocks that plummeted. All this can create confusion and fear amongst anyone who doesn’t want to gamble their money away. Anyone, like us, who quite frankly, wants a less dramatic – dare we say boring – approach to building wealth towards our goals over the medium to long term.
The current narrative that’s being pushed so hard in the media and by certain investing apps, also alienates those of us who care about what we’re investing in, who want our money to also contribute to building a better world, not just more profitable big companies.
That’s why we built Verve Money. An app that has a whole lot of sophisticated investment processes going on in the background, so that things are simple for you the investor – whether you’re a beginner, or an advanced investor who doesn’t have time to mange things yourself. And the best part – you don’t need to pick stocks, our ethical investing experts do that for you.
We’ve ensured strong ethical screens, and that 20% of every portfolio is invested in climate solutions. So you can feel bloody good about the future your money is working towards.
So what do you need to know to get started? The good news is, we can teach you all the skills you need in this blog.
First, here’s the sophisticated work that Verve does behind the scenes to make it simple for you to get started with investing through an app designed to keep costs down.
1. We support you to articulate your investing goals
Verve is a goal based investing platform, meaning we help you invest toward your money goals — that could be about retiring comfortably someday, starting a business, buying a house, having kids, going on a fab holiday for your next milestone birthday, or just building wealth for the future. You name it.
Any beginner or advanced investor needs to know what their investment goals are and crucially their investment timeframe. This is important as it directly relates to risk appetite and the type of investment option you may choose to invest in (more on this below). At Verve we support you to think these goals through, including your investment timeframe.
2. Our experts curate investment options with different levels of risk appropriate for different goals
If you’re investing for a goal decades away, you’re probably going to want a different risk profile than if your goal is only a few years away.
Because if your goal is decades in the future you don’t really care about what happens in the next year, or the year after, your focus is on how your investment will grow over the long term.
However, if your investment is towards a shorter term goal, like a holiday or a car, then you’re more likely going to prioritise obtaining a positive return in the short term, over a higher potential long term return with more risk (because if your money goes down in the first or second year you may not have the time to leave the money invested and make up for it in later years).
At Verve, we surveyed hundreds of community members to understand what they are investing for and have developed different investment options with different risk profiles appropriate for a broad range of goals.
3. The investment options we have created are strongly diversified and that helps to reduce risk.
Have you heard the saying, “Don’t put all your eggs in one basket”? Diversification is finance lingo that basically explains the same idea. Putting all of your money into one investment is risky, because if it tanks, it will have a greater impact than if only part of your money was in that investment.
At Verve, we don’t believe that anybody can reliably pick winners: not your mate’s uncle who tells you to “buy facebook”, or the guy whose investor newsletter says to “sell Tesla”. The reality is that nobody knows what will happen in the share market tomorrow – and if they tell you they know, then they’re lying.
That’s why at Verve our investment options hold a range of different investments, including up to hundreds of individual companies that we can invest in directly or cost effectively through ETFs (Exchange Traded Funds)- our investment team is focussed on long term industry trends and not short term guesses.
But our investment options don’t just include investments that you can buy on the sharemarket.
We also include ‘alternative impact investments’ that aren’t listed on the stock exchange – think investments in green energy bonds and sustainability funds – investments that everyday investors can’t normally access but can have an incredible impact on our environment and society.
Because our investment options include a mix of stocks, bonds and impact focused alternatives, that all act differently from one another, the money you invest will be exposed to a range of investments that behave differently from one another- in other words, your investment is highly diversified.
4. We choose the investments to make it happen – including those with an incredible positive impact.
This is the fun part. When we invest directly, it means that our investment team is selecting the individual investments that form part of each investment option. This can involve buying shares on the stock exchange, or buying off market investments.
Our team keeps a special eye out for renewable energy investments and other investments that drive sustainability and equality – ensuring that at least 20% of each investment option is invested in climate solutions.
Of course we’ll keep you updated on the investments we’re making through our regular newsletter.
5. Over the years you are invested we will continually adjust the portfolios you are invested in and reinvest your dividends
We design the investment options for strong diversification and to ensure that the risk level is suitable for investments of different time horizons. The value of the investments inside your selected investment option will inevitably change over time. Sometimes, one type of investment (i.e. Australian shares, international shares, fixed income investments or positive impact investments) grows faster than the others. When this happens, the allocation of different investments can get knocked out of whack, so we’ll make adjustments to keep everything in line and ensure appropriate diversification, and also that the risk level remains suitable for the investment strategy you’ve chosen for your goal.
When the companies you are invested in pay dividends, we will also automatically invest this money for you, to help you reach your goals even faster.
So, what do you actually need to know as a beginner investor?
The answer is: Not much.
You don’t have to know which companies performed well last year and which ones “experts” think will do well in the future. You also don’t need to know what’s going on in the economy or with international trade or whether people are speculating about a future market downturn.
Although as an investor, we will keep you up to date on these trends and explain to you the investing decisions we’re making so you can learn along the way.
If you’ve decided that you’re ready to invest with Verve Money, the only two things you need to know are:
1. Your investing goals including your time frame and your tolerance for risk; and
2. An understanding of the three investment options that our experts have curated, so that you can decide which is the most appropriate investment option for your goal timeframe and risk appetite – you can find this information in the app and our website with a basic explanation below (of course we also always recommend that you take time to read the Product Disclosure Statement).
So go on. What are you waiting for?
Verve Money’s three investment options
All investment options are invested ethically and 20% if every option is invested in climate solutions.
This table can be found on the Verve Money website.
This article is published by Verve Money Pty Ltd (ABN 71 653 669 366, AFS Representative No. 001294184), a Corporate Authorised Representative of True Oak Investments Ltd (ABN 81 002 558 956; AFSL 238184), as the Manager of Verve Money. A friendly reminder that all the financial information contained in this article is general in nature and does not take into account your personal financial objectives, situation or needs. It’s important to do your own research and consider getting in touch with a professional adviser to access specific information tailored to your unique situation.
You should read the Product Disclosure Statement, Investment Guide, Target Market Determination and Financial Services Guide before making a decision to acquire, hold, or continue to hold, an interest in the Verve Money Fund. Visit www.vervemoney.com.au/documents to view these documents.
Interests in the Verve Money Fund (ARSN 662 622 899) are issued by Melbourne Securities Corporation Limited (ACN 160 326 545, AFSL 428289). When considering financial returns, return of capital is not guaranteed and past performance is not indicative of future performance.